The social housing regulator, Homes & Communities Agencies (HCA), is consulting on proposed changes to the accounting requirements for private providers of social housing for the second time.
A consultation was undertaken earlier in 2012 on a first draft direction. Following the responses received to the initial consultation HCA has made various changes to the proposed revisions to the accounting direction.
The current accounting direction was designed for providers registered under the Housing Act1996. These are all non profit making entities which are expected to comply with the Statement of Recommended Practice (SORP) 'Accounting by registered social housing providers'. This SORP remains in place for such bodies.
The revised accounting direction, which is being consulted on, is intended to provide a common baseline of disclosures within the accounts of private registered providers, relating to social housing activities. This covers organisations which have a wide range of constitutional structures - whether are registered under the Companies Act, as charities or as Industrial and Friendly Societies, and registered as either for-profit or not-for-profit.
As such, the revised accounting direction aims to reflect the diversity of all organisations (with the exception of local authorities) that may be registered under the Housing & Regeneration Act 2008. It also aims to ensure that funds and assets associated with social housing are reported in a consistent, open and transparent form.
The initial proposed changes included:
- a requirement to disclose social housing activities by way of segmental reporting in the notes to the accounts
- a focus on transparency of transactions between regulated and non-regulated entities
- enhanced remuneration disclosures, and
- updating and aligning with the revised regulatory standards to include reference to the statement if compliance with the requirements of the Value For Money (VFM) standard and code of governance in use
The main changes in light of the responses received from the first consultation include:
- reduction of references and definitions already contained within other documents or legislation. This makes it a shorter document and less likely to become out of date by changes being made to the other sources
- revision and clarification of transparency of regulated/non-regulated transaction disclosures. As such high level consolidated information rather than excessive detail will be required
- revision and clarification of VFM disclosures to align with the changes made to the VFM standard following the Regulatory Framework consultation, and
- revision to remuneration disclosures as a result of comments received.
The closing date for comments on the second consultation is 28 August 2012.
It is still proposed that the new direction will take effect for accounting periods commencing on or after 1 April 2012.
